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Online Self-Storage Auctions: Dealing With Winner Defaults

Although most online self-storage auctions go smoothly, problems occasionally arise. Here’s advice on handling winners who fail to pay or empty the unit.

By Leonard Pecker

Online auctions have become an increasingly popular way for self-storage operators to quickly and efficiently empty their delinquent and abandoned units. Although most of these transactions go smoothly, problems occasionally arise. Possible scenarios include:

  • The winner fails to pay.
  • The winner fails to show up and empty the unit.
  • The winner leaves unwanted items in the unit.

These things can happen with live auctions as well. Unfortunately, not all people keep their commitments—with or without a written contract. Here’s some information on why these situations might occur and advice for handling them.

Deadbeats

There are many reasons why an online-auction winner might not pay, show up, return your phone calls or respond to e-mails. The first and possibly most frequent is buyer’s remorse. The winner regrets his decision or changes his mind, and he thinks it’s easier to ignore the storage operator than admit he doesn’t want the merchandise.

In other cases, a bidder may have won more units than anticipated and simply doesn’t have the money to pay for them all. Weather conditions, truck breakdowns, and even failure to read the terms and conditions are other causes of default. Many bidders are new to storage auctions and think they can pick up the merchandise when it’s convenient for them, failing to understand the requirement to empty the unit within a specific timeframe.

Fortunately, non-payers are infrequent. Generally, less than 1 percent of winning bidders fail to pay. A professional bidder understands that if he fails to complete a transaction, his account will be suspended by the auction company. If he fails to meet the seller’s terms and conditions, his account may be closed entirely. As online auctions are often a prime source of goods for a bidder’s own business, it’s not good for him to be banned from the auction scene.

If a winner does fail to pay, the online-auction company will contact the second-highest bidder and offer him the merchandise at his last bid amount. However, he may no longer be interested. Believing he’s lost this particular auction, he may have bid on or won others. The more time that passes, the less chance that he will want the merchandise. Once a bidder has forgotten about a unit, he often forgets its contents, or he may no longer have the cash or a moving truck available.

If the second-highest bidder doesn’t want the unit, the only other option is to repost the listing and hope the new winner will follow through. Again, the number of non-payers is very limited, as most bidders are serious and sincere in their efforts to procure quality, resalable merchandise.

Abandoned Goods

In some situations, the winner empties the unit, but not entirely. Inexperienced bidders may not think this is a problem so long as they’ve paid. Each bidder generally provides a cleaning deposit, which can range from $50 to $100, when he pays for his winnings. It’s pretty standard for storage operators to charge this deposit to ensure compliance, and it’s refunded once the unit is emptied. But some winners don’t care. Even if they lose their deposit, many think it’s OK to leave some stuff behind.

If there’s anything left in the unit, you’re not able to rent the space to a new customer. It then falls on your shoulders to empty the unit, costing you time and effort, or repost the unit for auction with whatever items remain. If this happens, your one recourse is to confiscate the winner’s cleaning deposit. While it doesn’t resolve the problem, it adds a few dollars to the final sale. Some online-auction companies also state in their terms and conditions that failure to completely empty the unit will result in suspension of the bidder’s account.

In some cases, all the unit contents have been picked through, and all that’s left is trash or unusable items. If the winning bidder leaves good merchandise in the unit and never returns, even after numerous efforts to contact him, you might decide to remove the goods through charitable donations, garbage disposal, flea markets or private sales.

The other option is to repost the unit in the hopes of attracting new bidders. Of course, this requires taking new photos, adjusting or changing the unit description, perhaps decreasing the starting price and disclosing that the unit is being relisted. The key is to decide on a course of action and empty the unit so you can rent it again.

Winner defaults are few and far between, but if they occur, work with your online-auction partner to resolve the problem quickly. In the case of abandoned goods, remind your winner of the terms and conditions. Usually, a prompt will resolve the problem. In either case, the goal is to empty the unit and get it ready for the next customer.

Leonard Pecker is the director of customer service for iBid4Storage.com, an online storage-auction marketplace where sellers and buyers in North America can benefit and prosper. For more information, call 855.402.4243; e-mail [email protected]; visit www.ibid4storage.com.

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